Shri U. PhoolChand (EH), Mulbagal V. CIT-IV, Bangalore

ITA 363/BANG/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 5142 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-07-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 01-06-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 22-04-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JACINTA ZIMIK VASHAI
• Assessee Lawyers: KESHAV PRASAD; MANOJ D PUKALE
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Principle of natural justice; Cost of acquisition; Reasonable cause; Fair market value
• Section: 50C; 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI GEORGE GEORGE K., JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ITA NO.363/BANG/2009 ASSESSMENT YEAR : 2004-05 SHRI U. PHOOL CHAND, GUARDIAN OF MINOR ASSESSEE P. SANJAY KUMAR, OLD HOSPITAL ROAD, MULBAGAL, KOLAR DISTRICT. : APPELLANT VS. THE INCOME TAX OFFICER, WARD 1, KOLAR. : RESPONDENT APPELLANT BY : S/SHRI MANOJ D. PUKALE, ADVOCATE & KESHAV PRASAD RESPONDENT BY : SMT. JACINTA ZIMIK VASHAI, ADDL.CI T(DR) O R D E R PER A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE CIT (A)-II, BANGALORE IN ITA NO: 158/W 1(KLR) / CIT (A)-II/07-08 DATED: 10.2.2009 FOR THE ASSESSMENT YEAR 2004-05. 2. THE ASSESSEE, AN INDIVIDUAL - GUARDIAN OF HIS MI NOR SON P.SANJAY KUMAR HAS RAISED ELEVEN GROUNDS IN AN ILLUSTRATIV E AND ELABORATE MANNER. HOWEVER, ON A PERUSAL, THE ISSUES RAISED BY THE ASS ESSEE ARE REFORMULATED ITA NO.363/BANG/09 PAGE 2 OF 11 IN CONCISE MANNER FOR THE SAKE OF CLARITY AND PROPE R UNDERSTANDING, AS UNDER: (I) THE CIT(A) HAD ERRED IN NOT DECIDING THE ISS UE AS TO ADDITION OF RS.3,47,900/- AS UNEXPLAINED DIFFERENCE MADE BY AO; (II) THE CIT(A) HAS ERRED IN DISMISSING THE GROU ND IN RESPECT OF PENALTY PROCEEDINGS MENTIONED IN THE ASSESSMENT ORDER THOUG H THE APPEAL IS ALLOWED HOLDING THAT THE ASSESSMENT ORDER IS INCORR ECT AND ILLEGAL; (III) THE CIT(A) OUGHT TO HAVE HELD THAT THE AO FAI LED TO ACT UPON THE REQUEST OF THE ASSESSEE FOR APPOINTMENT OF VO TO AS CERTAIN FMV OF SITES SOLD AND VIOLATING THE PROVISIONS OF S.50C(2) OF TH E ACT; - THE CIT (A) HAD FAILED TO DIRECT THE AO TO REFER TH E ISSUE TO VO TO ASCERTAIN THE FMV SINCE THE VALUE FOR STAMP DUTY WA S EXCESSIVE AND TWICE THE FMV; - THE AUTHORITIES BELOW ERRED IN DECIDING THE ISSUE W ITHOUT GIVING SUFFICIENT OPPORTUNITY AND THE ASSESSMENT ORDER WAS VIOLATIVE OF PRINCIPLES OF NATURAL JUSTICE; - THE CIT (A) HAD FAILED TO OBSERVE THAT INCOME, IF C ONSIDERED GAINS IN BUSINESS THE TAX PAYABLE WILL BE LESS THAN TAX ON C G UNLESS THE FMV WAS CONSIDERED THROUGH VO AS REQUESTED BY THE ASSE SSEE; - THE CIT(A) ERRED IN APPRECIATING THE CASE THAT THE ACTUAL SALE CONSIDERATION OF THE SITES SOLD WAS THE FMV FOR THE PURPOSE OF COMPUTATION OF CG; & - THE CIT(A) FAILED TO OBSERVE THAT THE SELF ASSESSME NT MADE BY THE ASSESSEE ON CG OUT OF SALE CONSIDERATION AS FULL VA LUE CONSIDERATION AND TAX PAID THEREON AS CORRECT AND SUFFICIENT. 3. BEFORE PROCEEDING TO DEAL WITH THE ISSUES RAISED BY THE ASSESSEE, LET US HAVE A LOOK AT THE SEQUENCE OF EVENTS TOOK PLACE DURING THE INTERVENING PERIOD WHICH ARE DETAILED AS UNDER: I. THE APPEAL PREFERRED BY THE ASSESSEE WAS ORIGI NALLY SLATED FOR HEARING ON 27.7.09. THE HEARING WAS, HOWEVER, ADJO URNED TO 27.8.2009 AT THE REQUEST OF THE AR. NEITHER ON 27.8.09 NOR ON T HE SUBSEQUENT HEARING SCHEDULED ON 24.9.09 WAS REPRESENTED BY THE ASSESSE ES SIDE. THEREFORE, ITA NO.363/BANG/09 PAGE 3 OF 11 THE BENCH, VIDE ITS ORDER DATED: 9.10.2009, HAD DIS MISSED THE APPEAL AS INFRUCTUOUS FOR NON-PROSECUTION. II. SUBSEQUENTLY, THE ASSESSEE CAME UP WITH A MIS CELLANEOUS PETITION (FILED) ON 14.12.2009 WITH A PLEA THAT ON THE DATE OF EARLIER HEARING, THE ASSESSEES AR COULD NOT BE PRESENT DUE TO PERSO NAL INCONVENIENCE AND TO THAT EFFECT A PRAYER WAS MADE ON THE PREVIOUS DA Y OF HEARING THROUGH TELEGRAM, REQUESTING FOR A SHORT ADJOURNMENT AND, T HEREFORE, PRAYED THAT AN OPPORTUNITY BE AFFORDED TO PUT-FORTH HIS VIEW BY RECALLING THE EARLIER ORDER OF THE TRIBUNAL. III. AFTER DUE CONSIDERATION OF THE ASSESSEES P LEA AND ALSO THE CIRCUMSTANCES UNDER WHICH THE ASSESSEE WAS PREVENTE D BY A REASONABLE CAUSE, AS SET OUT IN THE ORDER, THE TRIBUNAL VIDE I TS ORDER IN M.P.NO.118/B/2009 DATED: 5.3.2010 RECALLED ITS EARL IER ORDER DATED: 9.10.2009. ACCORDINGLY, THE ASSESSEES APPEAL WAS TAKEN UP FOR FURTHER HEARING AND SUBSEQUENT ADJUDICATION. 4. WE SHALL NOW PROCEED TO DEAL WITH THE ISSUES WHI CH ARE, IN BRIEF, THAT THE RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER DISPUTE WAS FURNISHED, ADMITTING NIL INCOME. DURING THE PREVIOUS YEAR R ELEVANT TO THE AY UNDER DISPUTE, THE ASSESSEE HAD SOLD HIS SHARE OF PROPERT Y AND THE LONG TERM CAPITAL GAINS [LTCG] ARISING OUT OF SUCH SALE WAS C LAIMED AS EXEMPT ON THE GROUND THAT THE SAME WAS INVESTED UNDER CAPIT AL GAINS ACCOUNT SCHEME. ITA NO.363/BANG/09 PAGE 4 OF 11 4.1. HOWEVER, THE AO, FOR THE DETAILED REASONS SET- OUT IN HIS IMPUGNED ORDER AMONG OTHERS, HAD OBSERVED THAT IT WAS SEEN FROM THE CAPITAL ACCOUNT, THE ASSESSEE HAD ADDED THE ENTIRE SALE CON SIDERATION OF RS.31.32 LAKHS WITHOUT REDUCTION OF THE COST OF ACQUISITION AND THE COST OF IMPROVEMENT THOUGH THE SAME WAS REDUCED ON THE ASSE TS SIDE OF THE BALANCE SHEET. ON BEING QUERIED, THE ASSESSEE HAD FURNISHED A FRESH STATEMENT, ACCORDING TO WHICH, THE BREAK-UP OF SUCH ADVANCES WHEREIN 22 PERSONS WERE SHOWN TO HAVE ADVANCED RS.15000/- EACH AND ONE PERSON ADVANCED RS.17900/-. THESE ADVANCES WERE STATED T O BE MADE TOWARDS THE SITE DEVELOPMENT EXPENSES WHICH WERE COLLECTED SEPARATELY FROM EACH OF THE PERSONS TO WHOM THE SITES WERE SOLD ETC. 4.2. IT WAS, FURTHER, VIEWED BY THE AO THAT NO PERS ON WOULD HAVE PAID ONLY THE DEVELOPMENTAL EXPENSES BEFORE MAKING ADVAN CE FOR THE SITES, IF SO, SUCH ADVANCES ALSO TO HAVE APPEARED AS OUTSTAND ING AND SUCH SUMS OWED BY THOSE PARTIES, THEY WOULD HAVE FIGURED AS D EBTORS. SINCE THE DIFFERENCE WAS NOT RECONCILED WITH EVIDENCE, RS.3,47,900/- WHICH WAS EXCESS OF ASSETS OVER LIABILITIES WAS TREATED AS IN COME FROM OTHER SOURCES APART FROM TREATING THE INCOME FROM BUSINESS AT RS . 26,27,500/-. 5. AGGRIEVED, THE ASSESSEE TOOK UP THE ISSUES WITH THE CIT (A) FOR RELIEF. AFTER DUE CONSIDERATION OF THE GROUNDS RAISED, SUBSEQUENT WRITTEN SUBMISSIONS OF THE ASSESSEE AND ALSO THE CASE LAWS RELIED ON BY EITHER PARTY, THE LD. CIT (A), PLACING RELIANCE ON THE FIN DING OF THE HONBLE MADRAS HIGH COURT IN THE CASE OF CIT V. A.MOHAMMED MOHIDE EN REPORTED IN (1989) 176 ITR 393, HAS OBSERVED THUS ITA NO.363/BANG/09 PAGE 5 OF 11 3.7.IN THE INSTANT CASE, THE APPELLANT IN FACT ACQUIRED PROPERTY ON PARTITION OF HUF AND THEN SUBSEQUENTLY DEVELOPED IT INTO SITES IN ORDER TO GET MORE REALIZATION OF BETT ER PRICE. THEREFORE, AS RIGHTLY POINTED OUT BY THE AR OF THE APPELLANT, THE ACTIVITY OF THE APPELLANT CANNOT BE CONSTRUED AS CO NVERSION OF PROPERTY INTO STOCK-IN-TRADE OR THAT THE APPELLANT HAD CARRIED ON ANY TRADING ACTIVITY. ON THE FACTS STATED AS ABOVE , IN MY CONSIDERED OPINION THE PROFIT ARISING OUT OF THE SA LE OF SITES IS TO BE BROUGHT TO TAX ONLY AS CAPITAL GAINS. ACCORDINGLY, THE AO IS DIRECTED TO RECOMPUTE THE PROFIT ON SALE AS LONG-TE RM CAPITAL GAINS. 6. DISILLUSIONED WITH THE FINDINGS OF THE LD. CIT ( A), THE ASSESSEE HAS COME UP WITH THE PRESENT APPEAL. DURING THE COURSE OF HEARING, THE LD. AR REITERATED MORE OR LESS WHAT WAS URGED BEFORE THE F IRST APPELLATE AUTHORITY. IN FURTHERANCE, IT WAS SUBMITTED THAT (I) THE CIT (A) HAD FAILED TO DIRECT THE AO TO REFER TH E ISSUE TO VO TO ASCERTAIN THE FMV SINCE THE VALUE FOR STAMP DUTY WA S EXCESSIVE AND TWICE THE FMV; - THE AUTHORITIES BELOW ERRED IN DECIDING THE ISSUE W ITHOUT GIVING SUFFICIENT OPPORTUNITY AND THE ASSESSMENT ORDER WAS VIOLATIVE OF PRINCIPLES OF NATURAL JUSTICE; - THE CIT (A) HAD FAILED TO OBSERVE THAT INCOME, IF C ONSIDERED GAINS IN BUSINESS THE TAX PAYABLE WILL BE LESS THAN TAX ON C G UNLESS THE FMV WAS CONSIDERED THROUGH VO AS REQUESTED BY THE ASSE SSEE; - THE CIT(A) ERRED IN APPRECIATING THE CASE THAT THE ACTUAL SALE CONSIDERATION OF THE SITES SOLD WAS THE FMV FOR THE PURPOSE OF COMPUTATION OF CG; & - THE CIT(A) FAILED TO OBSERVE THAT THE SELF ASSESSME NT MADE BY THE ASSESSEE ON CG OUT OF SALE CONSIDERATION AS FULL VA LUE CONSIDERATION AND TAX PAID THEREON AS CORRECT AND SUFFICIENT. - RELIES ON THE CASE LAWS OF (A) MEGHRAJ BAID V. ITO (2008) 114 TTJ (JD) 841; (B) A.SHAIK MOHIDEEN V. ITO (2009) 123 TTJ (CHENNAI) 41 6.1. DURING THE COURSE OF HEARING, THE LD. A R FURN ISHED A PAPER BOOK CONTAINING 1 12 PAGES WHICH CONSIST OF, INTER ALI A, COPIES OF (I) ITA NO.363/BANG/09 PAGE 6 OF 11 CORRESPONDENCE WITH THE AO; (II) WRITTEN SUBMISSION BEFORE THE CIT(A); (III) CAPITAL ACCOUNT/BALANCE SHEET ETC. 6.2. ON THE OTHER HAND, THE LD. D R WAS VERY S PECIFIC IN HER URGE THAT THE AUTHORITIES BELOW HAVE ANALYZED THE ISSUE AT A GREATER LENGTH AND HAVE COME TO A CONCLUSION WHICH IS IN CONFORMITY WITH TH E PROVISIONS OF THE ACT AND, THEREFORE, PLEADED THAT THE IMPUGNED ORDER OF THE LD. CIT (A) REQUIRES NO INTERFERENCE AT THIS STAGE. 7. WE HAVE DULY CONSIDERED THE RIVAL SUBMISSIONS , VIEWED THE RELEVANT RECORDS AND ALSO THE EVIDENCES ADVANCED DU RING THE COURSE OF HEARING BY EITHER PARTY IN THE SHAPE OF PAPER BOOK ETC. 7.1. AT THE OUTSET, WE WOULD LIKE TO POINT OUT T HAT ON A DILIGENT PERUSAL OF THE GROUNDS OF APPEAL RAISED BEFORE THE FIRST AP PELLATE AUTHORITY, THE ISSUE OF ADDITION OF RS.3.47 LAKHS UNDER THE HEAD INCOME FROM OTHER SOURCES HAD NEITHER BEEN FINDING A PLACE NOR THE L D. CIT(A) DEALT WITH THE ISSUE EXPLICITLY EXCEPT A PASSING REMARK IN THE FIR ST PARAGRAPH OF HIS IMPUGNED ORDER THAT .BUT THE AO HELD THAT THE PROFIT ARISING FROM TH E SALE OF THE SAID PROPERTY CONSTITUTED INCOME FROM B USINESS AND BROUGHT TO TAX A SUM OF RS.26,27,500/- ACCORDINGLY. IN ADDITI ON, THE AO BROUGHT TO TAX A SUM OF RS.3,47,900/- UNDER OTHER SOURCES. THE APPEAL IS AGAINST THE ASSESSMENT SO MADE. 7.2. SINCE THIS ISSUE WAS NOT CONTESTED BEFORE TH E CIT (A) AND ALSO THE FIRST APPELLATE AUTHORITY HAD NOT MADE ANY COMMENT ON THE SAME, IT DOESNT SURVIVE FOR ADJUDICATION BEFORE THE BENCH. HOWEVER , IN THE PRINCIPLES OF ITA NO.363/BANG/09 PAGE 7 OF 11 NATURAL JUSTICE, THE ISSUE IS REMITTED BACK ON THE FILE OF THE AO FOR CONSIDERATION WITH A SPECIFIC DIRECTION TO TAKE APP ROPRIATE ACTION IN ACCORDANCE WITH THE PROVISIONS OF THE ACT, OF COURS E, AFTER AFFORDING AN OPPORTUNITY TO THE ASSESSEE OF BEING HEARD. IT IS ORDERED ACCORDINGLY. 8. WITH REGARD TO THE DISMISSAL OF THE ISSUE IN RES PECT OF PENALTY PROCEEDINGS INITIATED U/S 271(1)(C) OF THE ACT BY T HE CIT (A), THE LD. A R, DURING THE COURSE OF HEARING, DID NOT PRESS THIS GR OUND AND, ACCORDINGLY, THIS GROUND IS DISMISSED AS NOT PRESSED. 9. THE CRUX OF THE NEXT ISSUE IS THAT - THE CIT(A) OUGHT TO HAVE HELD THAT THE AO FAILED TO ACT UPON THE REQUEST OF THE ASSESSEE DATED 22.11.2006 FOR APPOI NTMENT OF VALUATION OFFICER TO ASCERTAIN FMV OF SITES SOLD A ND VIOLATING THE PROVISIONS OF S.50C(2) OF THE ACT; - THE CIT (A) HAD FAILED TO DIRECT THE AO TO REFER THE ISSUE TO VO TO ASCERTAIN THE FMV SINCE THE VALUE FOR STAMP DUTY WA S EXCESSIVE AND TWICE THE FMV; - THE AUTHORITIES BELOW ERRED IN DECIDING THE ISSUE WITHOUT GIVING SUFFICIENT OPPORTUNITY AND THE ASSESSMENT ORDER WAS VIOLATIVE OF PRINCIPLES OF NATURAL JUSTICE; - THE CIT (A) HAD FAILED TO OBSERVE THAT INCOME, I F CONSIDERED GAINS IN BUSINESS THE TAX PAYABLE WILL BE LESS THAN TAX ON C G UNLESS THE FMV WAS CONSIDERED THROUGH VO AS REQUESTED BY THE ASSE SSEE; - THE CIT(A) ERRED IN APPRECIATING THE CASE THAT TH E ACTUAL SALE CONSIDERATION OF THE SITES SOLD WAS THE FMV FOR THE PURPOSE OF COMPUTATION OF CG; & - THE CIT(A) FAILED TO OBSERVE THAT THE SELF ASSES SMENT MADE BY THE ASSESSEE ON CG OUT OF SALE CONSIDERATION AS FULL VA LUE CONSIDERATION AND TAX PAID THEREON AS CORRECT AND SUFFICIENT. 9.1. LET US HAVE A GLIMPSE OF WHAT SECTION 50C OF THE ACT SAYS: 50C. (1) WHERE THE CONSIDERATION RECEIVED OR ACCRUI NG AS A RESULT OF THE TRANSFER BY AN ASSESSEE OF A CAPITAL ASSET, BEI NG LAND OR BUILDING OR BOTH, IS LESS THAN THE VALUE ADOPTED OR ASSESSED BY ANY AUTHORITY OF A STATE GOVERNMENT (HEREINAFTER IN THIS SECTION REFER RED TO AS THE STAMP VALUATION AUTHORITY) FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN ITA NO.363/BANG/09 PAGE 8 OF 11 RESPECT OF SUCH TRANSFER, THE VALUE SO ADOPTED OR A SSESSED SHALL, FOR THE PURPOSES OF SECTION 48, BE DEEMED TO BE THE FULL VA LUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF S UCH TRANSFER. (2) WITHOUT PREJUDICE TO THE PROVISIONS OF SUB-SEC TION (1), WHERE- (A) THE ASSESSEE CLAIMS BEFORE ANY ASSESSING OFFICE R THAT THE VALUE ADOPTED OR ASSESSED BY THE STAMP VALUATION AUTHORIT Y UNDER SUB- SECTION (1) EXCEEDS THE FAIR MARKET VALUE OF THE PROPERTY AS ON THE DATE OF TRANSFER; (C) THE VALUE SO ADOPTED OR ASSESSED BY THE STAMP VALUA TION AUTHORITY UNDER SUB-SECTION (1) HAS NOT BEEN DISPUT ED IN ANY APPEAL OR REVISION OR NO REFERENCE HAS BEEN MADE BE FORE ANY OTHER AUTHORITY, COURT OR THE HIGH COURT, THE ASSESSING OFFICER MAY REFER THE VALUATION OF TH E CAPITAL ASSET TO A VALUATION OFFICER AND WHERE ANY SUCH REFERENCE IS M ADE, THE PROVISIONS OF SUB-SECTIONS (2), (3)(4)(5) AND (6) OF SECTION 1 6A , CLAUSE (I) OF SUB- SECTION (1) AND SUB-SECTIONS (6) AND (7) OF SECTION 23A, SUB-SECTION (5) OF SECTION 24, SECTION 34AA, SECTION 35 AND SECTION 37 OF THE WEALTH- TAX ACT, 1957 (27 OF 1957) SHALL, WITH NECESSARY MO DIFICATIONS, APPLY IN RELATION TO SUCH REFERENCE AS THEY APPLY IN RELATIO N TO A REFERENCE MADE BY THE ASSESSING OFFICER UNDER SUB-SECTION (1) OF S ECTION 16A OF THAT ACT. 9.2. ON A DECISIVE VIEW OF SECTION 50C (2) OF THE ACT, WE FIND THAT IF THE ASSESSEE CLAIMS BEFORE ANY ASSESSING OFFICER THAT THE VALUE ADOPTED OR ASSESSED BY THE STAMP VALUATION AUTHORITY UNDER SUB -SECTION (1) EXCEEDS THE FAIR MARKET VALUE OF THE PROPERTY AS ON THE DATE OF TRANSFER; THE ASSESSING OFFICER MAY REFER THE VALUATION OF THE CAPITAL ASSE T TO A VALUATION OFFICER 9.3. HOWEVER, THE AO IN HIS IMPUGNED ORDER HAD OBSERVED THUS 6.AS PER THESE AGREEMENTS, THE MARKET VALUE OF THE SITES WAS PLACED AT RS.72000/- FOR EACH OF THE SITES AND RECITAL OF THE AGREEMENT SHOWED THAT THE COST OF THE SITE WAS RS.3 3000/- AND RS.15000/- WAS COLLECTED TOWARDS DEVELOPMENT EXPENS ES. THE QUESTION OF APPLYING THE PROVISIONS OF SECTION 50C OF THE IN COME-TAX ACT THEREFORE CAME UP FOR CONSIDERATION. AS PER THE PR OVISIONS OF SECTION 50C OF THE I.T. ACT, THE MARKET VALUE OF THE PROPER TY SHALL BE ADOPTED ITA NO.363/BANG/09 PAGE 9 OF 11 AS THE DEEMED SALE CONSIDERATION FOR THE PURPOSE OF COMPUTING THE CAPITAL GAINS. HOWEVER , IF IT WAS THE CASE OF AN UNDERVALUATION ASSESSMENT MADE BY THE REGISTRATION AUTHORITIES, WH ICH WAS NOT IN DISPUTE, THEN THE ASSESSEE WAS AT LIBERTY TO SEEK F OR THE VALUATION OF THE PROPERTY AND SUCH A REQUEST WOULD HAVE A BINDIN G EFFECT ON THE ASSESSING OFFICER. IN THE INSTANT CASE, THE ASSESSEE HAS ADMITTED BY VOLITION THAT THE PROPERTY FETCHED A MARKET VALUE OF RS.720 00/- AND THE REGISTERED AMOUNT OF SALE CONSIDERATION WORKED OUT ONLY RS.48000/- INCLUSIVE OF RS.15000/- TOWARDS DEVELOPMENT EXPENSE S. THE STAMP DUTY HAS ALSO BEEN ADMITTEDLY PAID BY THE PURCHASER ON A SUM OF RS.72000/-. THEREFORE, IN THE INSTANT CASE, THERE IS NO QUESTIO N OF ANY VALUATION DONE BY THE REGISTRATION AUTHORITY WHICH HAD BEEN ACCEPTED BY THE ASSESSEE BUT WAS CASE WHEREIN BOTH THE PURCH ASER AND THE SELLER HAD RECOGNIZED THE MARKET VALUE BUT CHOSEN TO REGIS TER THE TRANSACTION AT LOWER CONSIDERATION FOR THE REASONS BEST KNOWN T O THEM. THEREFORE, THE PROVISIONS OF SECTION 50C SQUARELY APPLIED IN T HE CASE .. 9.4. THE AOS VERSION WAS THAT, THE ASSESSEE HAD V OLUNTARILY ADMITTED THAT THE SUBJECT PROPERTY FETCHED A MARKET VALUE OF RS.72000/- EVEN THOUGH THE REGISTERED AMOUNT OF SALE CONSIDERATION WORKED OUT, ACCORDING TO THE AGREEMENTS SO EXECUTED, AT RS.48,000/-. ADMITTEDLY , THE STAMP DUTY HAD ALSO BEEN PAID BY THE PURCHASER ON A SUM OF RS.72,0 00/-. 9.5. HOWEVER, THE ASSESSEE HAS COME UP WITH A SPE CIFIC PLEA BEFORE THIS BENCH THAT THE AO HAD FAILED TO ACT UPON THE R EQUEST MADE BY HIM VIDE HIS COMMUNICATION DATED 22.11.2006 [SOURCE: P 1 OF PB AR] THE RECEIPT OF WHICH WAS DULY ACKNOWLEDGED BY THE REVENUE. IT CO ULD NOT BE ASCERTAINED FROM THE IMPUGNED ORDER OF THE AO THAT WHETHER THE CONTENTS OF THE ASSESSEES COMMUNICATION HAVE BEEN KEPT IN V IEW WHILE DECIDING THE ISSUE. HAD IT BEEN SO, IN OUR VIEW, IT SHOULD HAVE BEEN FOUND A PLACE IN THE IMPUGNED ORDER? IT WAS RATHER WANTING. 9.6. IN VIEW OF THE ABOVE AND IN THE PRINCIPLES OF NATURAL JUSTICE, THIS ISSUE IS REMITTED BACK ON THE FILE OF THE AO WITH A SPECI FIC DIRECTION TO LOOK INTO ITA NO.363/BANG/09 PAGE 10 OF 11 THIS ASPECT AND TO TAKE APPROPRIATE ACTION IN ACCOR DANCE WITH THE PROVISIONS OF THE ACT AFTER AFFORDING AN OPPORTUNITY TO THE AS SESSEE OF BEING HEARD. WHILE DOING SO, THE AO SHALL RECORD HIS REASONS EXP LICITLY WHETHER HE IS IN AGREEMENT WITH THE ASSESSEES CONTENTION(S) OR OTHE RWISE. IT IS ORDERED ACCORDINGLY. 10. BEFORE PARTING WITH THE ISSUE, WE WOULD LIKE TO MENTION THAT WE HAVE DULY PERUSED THE FOLLOWING CASE LAWS ON WHICH THE A SSESSEE HAD PLACED HIS STRONG RELIANCE: (I) IN THE CASE OF MEGHRAJ BAID V. ITO REPORTED IN (2008) 114 TTJ 841 JODHPUR), THE HONBLE TRIBUNAL WAS PLEASED TO OBSER VE THAT IN CASE THE AO DOES NOT AGREE WITH THE EXPLANATION OF ASSES SEE WITH REGARDS TO LOWER SALE CONSIDERATION THAN THE VALUE ADOPTED BY STAMP VALUATION AUTHORITY, HE SHOULD REFER THE MATTER TO DVO UNDER SUB- SECTION (2) OF S.50C. THE WORD MAY IN S. 50(2) H AS TO BE READ AS SHOULD SO THAT THE PROVISION IS NOT RENDERED REDU NDANT. WITH RESPECTS, WE WOULD LIKE TO POINT OUT THAT IN THE ABOVE CASE THE HONBLE TRIBUNAL OBSERVED THAT IF THE AO DOESNT AGREE WITH THE ASSESSEES EXPLANATION WITH REGARD TO LESS SALE CONSIDERATION THAN THE VALUE ADOPTED BY THE SVA, THE MATTER IS TO BE REFERRED TO FOR VAL UATION. (II) IN THIS CONNECTION, WE RECALL THE PRESENT ASSESSEES LETTER DATED: 22.11.2006 ADDRESSED TO THE AO WHEREIN HE HAD STATED IN THE LAST PARA THAT THEREFORE, IT IS HUMBLY REQUESTED YOU SIR, TO ADOP T THE ACTUAL SALE CONSIDERATION OF RS.31,32,000/- AS FULL VALUE CONSI DERATION SINCE IT IS FAIR MARKET VALUE OF CONSIDERATION FOR COMPUTATION OF CA PITAL GAINS IN THE INTEREST OF JUSTICE AND AT LEAST REFER THE VALUATIO N OF THE LAND TO A VALUATION ITA NO.363/BANG/09 PAGE 11 OF 11 OFFICER TO ASCERTAIN THE FAIR MARKET VALUE AND AFFO RD OPPORTUNITY TO THE ASSESSEE MINOR IN THIS REGARD. IN VIEW OF THE ABOVE, WE HAVE TAKEN A VIEW TO REMIT BACK THE ISSUE TO THE AO (VIDE PARA 9.6 SUPRA) TO CONSIDER THE ASSESSEES REQUEST AND TAKE APPROPRIATE ACTION IN ACCORDANCE WITH THE PROVISION S OF THE ACT. 11. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSE. PRONOUNCED IN THE OPEN COURT ON THIS 23 RD DAY OF JULY, 2010. SD/- SD/- ( GEORGE GEORGE K. ) (A. MOHAN ALANKAMONY ) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 23 RD JULY, 2010. DS/- COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR ITAT, BANGALORE.